Trustbusters Targeting Cartels Abroad Reined in by U.S. Judges
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“The ruling opens the doors to foreign cartels to shield themselves from U.S. law by selling to a third party instead of directly into the U.S., said Robert Connolly, a lawyer at GeyerGorey LLP and a former prosecutor with the Justice Department’s antitrust division.
‘People can fix prices and then use a middleman,’ he said. ‘From an American consumer point of view, there’s really no difference.'”
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Investigation Has Yielded 15 Guilty Pleas to Date
A former New York-based tax liens company executive pleaded guilty today for his role in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of tax liens, the Department of Justice announced.
Vinaya K. Jessani, of New York City, entered a guilty plea in the U.S. District Court for the District of New Jersey in Newark to felony charges filed today. Under the plea agreement, Jessani has agreed to cooperate with the department’s ongoing investigation.
According to the charge, from at least as early as 1994 until as late as February 2009, Jessani, a former senior vice president who supervised the purchasing of municipal tax liens at auctions in New Jersey for the company he worked for, participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to, and instructing others to, allocate among certain bidders which liens each would bid on. The department said that Jessani and those under his supervision submitted bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.
“Today’s guilty plea demonstrates the Antitrust Division’s continuing effort to prosecute those who manipulate the competitive process in order to harm home and property owners,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The division will continue to be vigilant in rooting out conspiracies that harm already distressed property owners.”
The department said that the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. New Jersey state law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.
According to court documents, the conspiracy permitted the conspirators to purchase tax liens with limited competition and each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the $1 million statutory maximum.
Today’s plea is the 15th guilty plea resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. Including Jessani, 12 individuals and three companies have pleaded guilty. Additionally, four individuals and two entities have been indicted for their roles in the conspiracy to rig bids at tax lien auctions.
Today’s case was done in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.
GeyerGorey LLP announced today that Robert E. Connolly has joined the firm’s Washington, D.C. office as a partner. Connolly spent most of his career as a prosecutor with the Middle Atlantic Field Office of the Antitrust Division, Department of Justice. Connolly joined that office in 1980 and was Chief from 1994 until early 2013. More recently, Robert E. Connolly has been with DLA Piper in Philadelphia. Connolly will lead GeyerGorey’s corporate internal investigations practice. Founding partner Brad Geyer said “Bob is a natural fit for our culture, which requires constant disciplined teamwork and focus on client solutions that spring from the firm’s’ deep prosecutorial experience”
Connolly said: “I am excited to join my former DOJ colleagues. Collectively we have worked on many of the Division’s most significant criminal and civil matters. We have unique insights and experience to offer clients. The firm’s unique approach and rapid growth further strengthens our ability to serve clients faced with government investigations.”
“We expect Bob will be involved in much of the firm’s current portfolio of work, in addition to leading the corporate internal investigation practice,” said founding partner Hays Gorey. “Bob has a notable reputation for his representation in high-stakes matters. He will strengthen our ability to represent multinational clients in complex litigation, as well as in high-profile regulatory and enforcement agency investigations.” Connolly will be also be part of GeyerGorey’s compliance team, which blends its experience in enforcement, in-house counseling, criminal and civil defense, and qui tam litigation, to help companies efficiently identify, address, and mitigate litigation risks from the onset and develop an organizational culture that encourages ethical conduct and a commitment to comply with the law.
In his career with the Division, Connolly led major national and international white-collar crime investigations in the areas of antitrust, fraud and obstruction of justice. He is known for innovative investigative and trial strategy and a command presence in the courtroom. He left the government with one of the, if not the most successful, trial records in Antitrust Division history. Connolly was known for his building and leading effective teams that had an extraordinary commitment to successfully completing the mission.
Notably, Connolly led the international graphite electrodes cartel grand jury investigation, which resulted in seven corporate and three individual convictions and approximately $437 million in fines, including what was then the largest post-trial criminal fine in Antitrust Division history. The investigation was capped by charging, trying and convicting a foreign corporation of aiding and abetting the cartel. Connolly, as lead trial attorney, along with GeyerGorey’s Wendy Norman, received the DOJ’s highest litigation honor, the John Marshall Award for Outstanding Legal Achievement for Trial Litigation. More recently, Connolly’s office led the historic effort to extradite Ian Norris to the United States from Britain to stand trial on obstruction of justice charges, of which Norris was later convicted.
In addition to his prosecutorial experience, Connolly was the Victor Kramer Fellow at Yale University in 1989-1990. He has served as an adjunct professor of antitrust law at Rutgers-Camden Law School and later Drexel School of Law. He currently serves on the Advisory Board for the ABA Cartel and Criminal Practice committee and since leaving the Antitrust Division in 2013, has authored more than a dozen articles on U.S. and international competition law practice.
University of Tennessee College of Law
March 26, 2014
Competition Policy International, April 2014, Forthcoming
We argue that notwithstanding Comcast’s and TWC’s assertions, combining two monopolies does not yield better service, lower retail prices, more innovation, and greater choices for consumers. Nor should the DOJ and FCC simply extend the prior behavioral remedies to this merger. Behavioral remedies are a poor substitute for market competition. Comcast and TWC have not overcome the presumption of illegality for this merger and are unlikely to do so. As was the case with AT&T/T-Mobile, DOJ should just say no.
University of Tennessee College of Law
December 10, 2013
Abstract:
Allen Grunes will speak at a conference on international trends in private antitrust enforcement that is being held in Seoul, South Korea on November 1, 2013. He will present a paper on the U.S. experience with treble damages as part of a program examining private enforcement in the EU, U.S. and China and recent developments in Korea. The program is jointly sponsored by the Korea University ICR Law Center, the Korean Competition Law Association, and the SNU Center for Competition Law. More information may be found on the ICR website.
This essay raises several concerns. First, Wright’s proposed legal standard does not go as far as Congress intended. Moreover it conflates unfair methods of competition with acts and practices that significantly harm consumer welfare. A second concern is that the proposed legal standard goes the other direction and permits conduct that is otherwise illegal under the Sherman and Clayton Acts. Third, the proposed standard reduces accuracy, is hard to administer in connection with the traditional antitrust standards, and increases the risk of inconsistent outcomes for behavior outside the well-forged antitrust case law, but within the Sherman and Clayton Acts’ reach.
“Rocketing from two to eleven attorneys in eight months, GeyerGorey LLP sports over 200 years of cross-disciplinary prosecutorial experience involving a host of domestic and international industries where each of its attorneys has worked on internal investigations and high stakes cases for an average of more than 20 years.”
For more, click the link below:
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Allen Grunes took a moment to discuss his latest law review article on the intersection of privacy and Antitrust Law and suggests its implications for the future:
“Another Look at Privacy, 20 Geo. Mason L. Rev. (Summer 2013)“
“Antitrust law does not often take privacy issues into account, even when construing ‘privacy’ in its broadest sense to include privacy policies, the collection and subsequent use or sale of personal information, and privacy regulation. Issues involving privacy and its flip side, “big data,” occasionally do surface in antitrust matters, but by and large they remain on the margin. There have been a handful of attempts to move privacy more toward the center of the antitrust universe, but they have not been very successful.
In this Article, I first discuss some of the challenges consumer privacy poses and why antitrust has had a difficult time with privacy considerations. Next, I discuss several arguments that a few brave souls have made urging that privacy should be more central to antitrust—especially when consumer data is at the center of a merger, as it was in Google/DoubleClick. I then look at some of the ways that, on the periphery, antitrust law does incorporate privacy issues. Finally, I offer what is hopefully a more nuanced and productive way of thinking about the issue based on several characteristics of online markets, and suggest a few interesting implications for the future.”
Law360: GeyerGorey Opens In Dallas With Former DOJ Antitrust Ace
By Alex Lawson
Law360, New York (August 07, 2013, 3:34 PM ET) — GeyerGorey LLP established its presence in Texas with a splash this week, securing the services of a former U.S. Department of Justice antitrust prosecutor to open its Dallas office, the firm announced Tuesday.
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Marshall added that the firm has a strong Foreign Corrupt Practices Act compliance program that she hopes to be heavily involved in.
While Marshall carries experience across a wide variety of industry sectors, senior partner Hays Gorey Jr. said her work in the energy sector will be of critical importance to the firm’s Texas operations.
“We are thrilled that Joan has decided to join us,” Gorey said. “She adds deep experience with numerous enforcement agencies and complements our experience in key industries like oil and gas exploration, not to mention the fraud piece.”
At DOJ, Marshall gained notoriety for her work in the wake of Hurricane Katrina, when she led the Antitrust Division’s bribery prosecutions centering on the construction of the levees surrounding New Orleans. She also served on the agency’s Hurricane Katrina Fraud Task Force, which was eventually rolled into the broader-reaching Disaster Fraud Task Force.
Firm co-founder Brad Geyer said Marshall’s work in the disaster fraud arena would dovetail nicely with the firm’s existing portfolio.
“We are very involved in servicing the government contractor and the nonprofit and nongovernmental organization community and we are excited to roll in Joan’s disaster fraud experience into our overall product offerings,” Geyer said. “It is also unusual to have career prosecutors in one firm that worked on the highest profile matters on both the criminal and civil worlds.”
Marshall received her law degree from Southern Methodist University and a Bachelor of Business Administration from the University of North Texas.
–Editing by Katherine Rautenberg.